DWP slammed for fraud computing failure

MPs blame slow improvements

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The Department for Work and Pensions has failed to measure benefit fraud properly because of its slowness to improve IT.

The accusation is made in a report by Parliament's Public Accounts Committee (PAC), which says that the department's new management information system, known as FRAIMS, was only introduced in February this year. This is despite the committee having warned the department in 2003 that its systems were not up to the job.

FRAIMS, a nationwide fraud case management system, has cost £65m. But in its report on 7 July 2008, the committee says that the system does not cover key elements of the DWP's counter fraud activity, most importantly the work of the prosecutions division.

The report calls on the department to assess the effectiveness of FRAIMS in tackling fraud and error in the benefit system, as well as evaluating counter-fraud activities not covered by the IT system.

Benefit fraud fell from £2bn in 2001-02 to £800m in 2006-07, due in part to the department's closer work with police and local authorities. There are important areas where the DWP still needs to improve its performance, according to the PAC.

"Where it detects attacks by organised crime, it must take a firm and coordinated approach. It must get a lot better at tracking down and recovering fraud debt," said Edward Leigh, chair of the committee.

"It must get a firm understanding of the cost effectiveness of its counter fraud activities: otherwise it cannot know that it is targeting its resources to best effect."

Despite these problems, the PAC found that although levels of benefit fraud and error in the UK are similar to comparable countries, the government appears to have a better understanding of the problems and the means of tackling them than other national social security agencies.

In its investigations of error, the committee found that the estimated amount of benefit lost annually because of error by claimants or benefit office staff has nearly doubled over five years to £2bn a year.

"This is not acceptable," said Leigh. "The DWP must direct its training and compliance checks on those local offices and benefits which prove to have the highest error rates."